By Anna Louie Sussman

WASHINGTON -- A gauge of U.S. service-sector activity fell in October, a sign that growth cooled slightly in key sectors of the U.S. economy.

The Institute for Supply Management said on Thursday its nonmanufacturing index fell to 54.8 in October from 57.1 in September. A reading above 50 signals expansion while a reading below 50 indicates contraction. The index has run above the 50 threshold for 81 straight months.

Economists surveyed by The Wall Street Journal had expected an October reading of 56.0. Drops in business activity, new orders and employment pulled the overall reading down.

"There has been a slight cooling-off in the non-manufacturing sector month-over-month, indicating that last month's increases weren't sustainable," said Anthony Nieves, who oversees the survey.

But some components of the index ticked higher. The price index rose by 2.6 points to 56.6 in October, which Mr. Nieves said largely reflected higher prices for petroleum-related products.

Thirteen industries reported growth, including transportation and warehousing, construction, management of companies, professional services and real estate. Five industries reported contraction, including educational services and mining.

Americans' spending on services accounts for around two-thirds of overall personal consumption expenditures, and the service sector provides the bulk of U.S. jobs. U.S. job growth in September was largely concentrated in service industries such as professional and business services, health care, retail and restaurants and bars. The Labor Department will release October's jobs figures on Friday.

The group's nonmanufacturing index covers a wide swath of business activity including retail trade, construction and services including health care. It has signaled continuous expansion since early 2010.

A separate measure of service-sector activity from private data provider Markit showed its services business activity index rose to 54.8 in October from 52.3 in September.

Write to Anna Louie Sussman at

(END) Dow Jones Newswires

November 03, 2016 10:56 ET (14:56 GMT)

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